SERI KEMBANGAN: Malaysia will see more trade activities with China with the opening of a new sea route between the ports of Kuantan and Huizhou in the southern Guangdong province.

A memorandum of understanding (MoU) was signed to enhance cooperation and the setting up of a port alliance between Kuantan Port Authority and Huizhou Port Affairs Adminis¬tration Bureau here yesterday.

Transport Minister Datuk Seri Liow Tiong Lai, who witnessed the event at the 9th Hui Zhou World Convention at Wisma Huazong here, said the cooperation was one of the initiatives to boost trade and economy between Malaysia and China under the One Belt, One Road strategy.

“We are also strengthening our partnership in human capacity training programmes,” he told a press conference, adding the first vessel was expected to ply the new route soon.

Liow said apart from working with the port authorities, Malaysia was also engaging ship liners and operators to explore more opportunities.

Some 1,500 guests of Hui Zhou clan from more than 10 countries including Canada, the United States, Holland, New Zealand, Brazil, Thai¬¬land and Britain attended the convention.

In his speech, Lee, who is also Kuantan Port Authority director, prai¬sed Prime Minister Datuk Seri Najib Tun Razak for bringing the Malaysia-China relationship to a new height.

Under his leadership, he said, investments from China had shown a tremendous increase over the past three years.

To his clansmen from overseas, he introduced Najib as a liberal leader, who leads the country with moderate and practical policies.

“He fights against extremism and terrorism while advocating power-sharing concepts by all races in the common efforts of bringing peace, development and prosperity to the country and its people,” he added.

He also urged his clansmen to set up a Hui Zhou overseas Chinese park and museum to preserve the more than 2,000-year-old history of the clan and its cultural heritage.

At the event, another MoU was signed to develop 18 parcels of mining concessions in Pahang to become eco-friendly parks for green technology industries and tourism attractions between Mekar Unggul, Supreme Broadway, Vibrant Holding and Angang Machinery Development.

THE STAR | 26 JUNE 2016 |

Kilang keluli Alliance Steel dibina di MCKIP

Kuantan identified as port city due to its strategic location

KUANTAN: The East Coast Economic Region Development Council (ECERDC) and the state government have earmarked Kuantan as the country’s renowned port city with its strategic location in the region and close proximity to China.

The council said in a press statement that the expansion of Kuantan Port into a deep water port was well underway and upon completion it would be capable of handling 52 million freight weight tonnes of bulk and container cargo.

“To date, the new breakwater, which will create a sheltered harbour has reached an advanced stage of completion while construction works are ongoing for the Port Link Road, which will significantly improve access between Kuantan Port and the Malaysia-China Kuantan Industrial Park and the East Coast Expressway,” said the statement issued after the ECER Implementation and Coordination (ICC) Pahang meeting recently.

ECERDC chief executive officer Datuk Seri Jebasingam Issace John said in the statement that as China strengthened its economic ties with Asian countries following its One Belt One Road policy, Kuantan is best positioned as a regional hub for investments in the Asia Pacific.

“In fact, Kuantan’s position as a Port City and gateway to the Asia-Pacific markets will help attract even more investments and trade activities in the ECER Special Economic Zone (ECER SEZ), which also includes Gambang and Pekan in Pahang. The spillover effects from these investments into the ECER will bring about better socio-economic benefits, especially job and entrepreneurial opportunities for the local communities,” he said.

The ICC meeting was chaired by Mentri Besar Datuk Seri Adnan Yaakob.

The statement also said that from May 30 until June 1, the second Malaysia-China “Two Countries, Twin Parks” joint promotion event would be held in Kuantan and Kuala Lumpur involving 100 delegates from China and 200 delegates from Malaysia.

During the event, both sides are expected to present investment opportunities in the Malaysia-China Kuantan Industrial Park and its sister park, the China-Malaysia Qinzhou Industrial Park, to potential investors from China and Malaysia while the Pahang state representative would present investment opportunities in Pahang.

ECER Development Council chief executive officer Datuk Seri Jebasingam Isaace John said the high level of interest shown thus far towards MCKIP and its twin sister park, China-Malaysia Qinzhou Industrial Park (CMQIP), underscores the long-standing partnership the two nations have had in driving economic growth in the region.

“We believe our continuous investments into the development of the twin parks, a key component of China’s ‘One Belt, One Road’ policy, will further drive bilateral trade between Malaysia and China.

“Importantly, the strong economic ties between the two countries will help attract more investors, particularly from China, which in turn will boost the socio-economic landscape for local communities in the ECER SEZ,” he said.

The new investors include Guangxi Investment Group Co Ltd, which will invest RM580 million in an aluminium component manufacturing facility, and LJ Hightech Material Sdn Bhd, which will invest RM1 billion in a high-technology production-based centre to produce concrete panels for construction industries and activated rubber powder.

The signing ceremony was held during the second Investment Promotion Conference for Malaysia-China, “Two Countries, Twin Parks”, jointly hosted by the Ministry of International Trade and Industry (Miti), the government of the Guangxi Zhuang Autonomous Region, the Pahang government, Malaysia-China Business Council and the ECER Development Council.

MCKIP was launched in 2013 and is the first industrial park in Malaysia to be jointly developed by Malaysia and China, and to be accorded the “National Industrial Park” status.

Meanwhile, Ong said Miti planned to use the US$100 billion (RM412 billion) fund under the Asian Infrastructure Investment Bank (AIIB) to strengthen the infrastructure systems and improve trade facilitation between Asean countries.

He said the US$100 billion is the initial capital injection by China to provide soft loans for infrastructure projects to the countries participating in the “One Belt, One Road” initiative, including Malaysia.

“When we say we plan to tap into the fund, we are not thinking that the development is limited to only Malaysia. We hope to develop and upgrade Malaysia and also Asean railway, road and port facilities so that we can have more interaction in commercial trading activities in the region.

“We hope to make use of some of the facilities provided by AIIB to develop infrastructure in Malaysia,” said Ong at the second Investment Promotion Conference for Malaysia-China “Two Countries, Twin Parks”, here, yesterday.

He said the ministry is in the middle of identifying infrastructure projects that fit into the initiative.

In September last year, the Guangdong province of China had signed a memorandum of understanding to enhance friendly and cooperative relations between both parties in the construction of a Maritime Industrial Park, the Guangdong-Malacca Industrial Estate, construction of a deep-sea port in Malacca and the construction/provision land-use areas for trade and commerce.

MCKIP to be expanded to a total land area of 1,238.33ha in response to encouraging demand

KUANTAN: A delegation of officials and investors from China visited the Malaysia-Kuantan China Industrial Park (MCKIP) and Kuantan Port here recently as part of the second Investment Promotion Conference for Malaysia-China “Two Countries, Twin Parks”.

Led by Guangxi Zhuang Autonomous Region of China vice-Governor Zhang Xiaoqin, the delegation sought to forge greater bilateral trade and economic relations between China and Malaysia, especially in Kuantan and Guangxi.

East Coast Economic Region Development Council (ECERDC) chief executive officer Datuk Seri Jebasingam lssace John said that in response to the encouraging demand, MCKIP would be expanded by another 323.75ha to a total land area of 1,238.33ha.

“The ongoing construction, development and expansion of MCKIP are important milestones, as they reinforce investors’ confidence in the ECER as an attractive investment destination.

“China has been a close trading partner and investor in the ECER. The increasing number of investments have spurred more infrastructure projects such as the construction of industrial parks, roads and railways.

“Importantly, the spillover effects from these investments into the ECER will bring about better socio-economic benefits such as increased job and entrepreneurial opportunities for the local community,” he said.

In addition to that, he said Kuantan Port was also currently being expanded into a deep water port capable of handling 52 million freight weight tonnes and vessels of up to 200,000 deadweight tonnage.

“Kuantan serves as a key growth catalyst for ECER with its strategic location in the region and close proximity to China. In fact, the city has been earmarked to be Malaysia’s renowned Port City similar to Rotterdam in the Netherlands, which is known as the Gateway to Europe.

“This will further attract more investments and trade activities in the ECER Special Economic Zone, including MCKIP,” said Jebasingam.

During the visit, government officials, corporate leaders and key investors planted a Khaya tree next to the MCKIP monument to symbolise the long lasting cooperation and growth prospects between the investors of both nations.

THE STAR | 16 JUNE 2016 |

Mega port in the making should worry Singapore

Muhibbah’s shipyard facility to gain from port activities

MUHIBBAH Engineering (M) Bhd’s planned RM2bil shipyard facility in Kuantan is driven mainly by the growing number of ships calling at the Kuantan Port.

That growth in turn is spurred by the Malaysia-China Kuantan Industrial Park (MCKIP), a massive initiative, spread over 3,000 acres near the Kuantan Port and which is targeted at energy-saving and environment-friendly technologies, alternative and renewable energies, high-end equipment manufacturing and the manufacture of advanced materials.

Muhibbah’s shipyard, dubbed as the Kuantan Maritime Hub (KMH) is to be developed on 500-acre. Early this week, the engineering and construction firm proposed to acquire 500 acres in Gebeng, Kuantan from the Pahang government for RM26.45mil.

The parcel has been earmarked for KMH by the state government, while Muhibbah would construct and operate the new shipyard. This will be Muhibbah’s first shipbuilding and fabrication base in the east coast. It currently has an smaller existing facility on 24-acre land in Port Klang, Selangor.

“Like any property venture, location is the most important factor. In this case, KMH is situated adjacent to Kuantan Port and the MCKIP. It has also about four km of coastline which means we could build bigger ships compared with our shipyard in Port Klang.

“Furthermore, there is no such facility of ship repair and maintenance in this east coast area to support the growing demand of ships calling at Kuantan Port. With MCKIP developing on a 3,000-acre land, Kuantan Port throughput is expected to increase going forward.

“Another positive factor of the KMH location is that KMH is protected from the monsoon” Muhibbah group finance director Shirleen Lee tells StarBizWeek recently.

Since the announcement of MCKIP in 2013, there have been notable developments taking place with committed investments totalling RM15.08bil. The current biggest investor is Alliance Steel Sdn Bhd, a subsidiary of Guangxi Beibu Gulf Iron and Steel Co Ltd from China, which has taken up 710 acres of MCKIP.

Meanwhile, Kuantan Port that currently has cargo handling capacity of 26 million freight weight tonnes (fwt) is reaching its full capacity. The port handled 23 million fwt last year.

Now, upgrading plans are underway in the form of the New Deep Water Terminal (NDWT), which will be completed in part in 2017.

Another factor that will ensure the success of KMH according to Lee is the oil and gas (O&G) fields that are mainly located in the South China Sea.

“This make sense for us to service the O&G vessels. In general, servicing and maintaining commercial and O&G vessels in the east coast will provide the company with another recurring income avenue,” she said.

On the cost of development, Lee says the RM2bil figure is just an estimation, the gross development value will be more accurate when the project design is completed.

“Nevertheless, it will be developed on a staggered basis over more than 10 years. The most important thing now is that we have a secured landbank to cater for future growth of shipbuilding, repair and maintenance in the east coast area,” she says.

On shipbuilding, Lee says KMH will also cater for expected contracts coming from the Defence Ministry.

“We are building one multi-purpose vessel for the ministry and we are proposing for more as we have the total shipbuilding solutions,” she says adding that the group’s total order book stands at RM2.2bil.

On the realising the vision of the state government, Lee says that the company appreciates the confidence of the state government in Muhibbah in developing a maritime hub in Kuantan.

“Of course this is backed by our 20 years of stellar track record and experience in the industry,” she says.

On strategic partners, Lee says Muhibbah is open to the idea but it is too early to disclose.

“Since the announcement, there are interested parties that have approached us, but we are still in initial stage,” she says.

According to Pahang Mentri Besar Datuk Seri Adnan Yaakob in a recent news report, besides the shipyard components, KMH will also include a technical training institute, maritime industry centre and mixed development projects.

From analyst perspective, CIMB Research says Muhibbah’s acquisition cost of RM26.5mil that works out to RM1.22 per sq ft could be considered cheap as it excludes reclamation cost.

“Hence, this new land deal is good news and provides greater conviction to this segment’s (shipyard) turnaround.

“Our forecast of one to two vessel orders per annum could be conservative if a similar RM92mil single vessel order from the marine department secured in late February accelerates in the next 18 months.

“And we think new vessel orders from the marine department may gain momentum and provide scale for expansion to utilise the new 500-acre land.

“This adds to the positive job flow outlook in second half of the year, underpinned by potential infrastructure job wins including Rapid,” says the research house.

THE STAR | 11 JUNE 2016 |

Possible reverse takeover of CWorks soon

KUALA LUMPUR: Information system developer CWorks Systems Bhd could be the target of a reverse takeover (RTO) by the Orion group in the near future.

On Jan 27, 2016, CWorks announced that it was proposing to change its name to Orion IXL Bhd, indicating the possibility of the entrance of a new shareholder.

Shares in CWorks have risen more than 100% since its closing on Jan 14 at 33 sen. Last Friday, CWorks shares were unchanged at 72 sen, with 4.6 million shares being done.

At a press conference held by Michael Ong, chairman of Michael Orion Sdn Bhd, he said CWorks was a part of a closed-door bid to secure a software contract for the KP Orion Tower project in Kuantan.

Loss-making CWorks has already secured a contract from PPYC Logistic (M) Sdn Bhd, a company under the Orion group, to design, develop and supply, and maintain an IT system for RM7.98mil.

The contract win, which CWorks announced in a filing with Bursa Malaysia on Feb 5, is for a four-year period.

CWorks chairman Datuk Elias Abdullah Ng expects the company’s financials to return to the black by the financial year ending Dec 31, 2016 following contribution from the PPYC contract and the potential of it securing more jobs.

“CWorks will be on a strong footing by the 2016 financial year,” he said.

As at the third quarter ended Sept 30, 2015, CWorks posted a net loss of RM300,000 on a revenue of RM853,000.

The KP Orion Tower project is a 28-storey building that will be located next to the Kuantan Port within the free trade zone in Kuantan.

Ong said the tower would be the tallest building in the east coast and would feature luxury shopping brands, a five-star hotel under the SPG group of hotels, and class-A office space.

“Kuantan Port Consortium and Kuantan Port Authority have already agreed to move their headquarters to this new building,” he said on Friday.

He added that about 85% of the offices in the building would be taken up by Asean companies, with some 30% already confirmed.

The KP Orion Tower is the first phase of Orion’s project on four hectares within the Kuantan free trade zone. Orion will also branch out into setting up a one-stop building materials hub there.

The second phase of development will comprise low-level serviced apartments and offices on 4.5ha. In the third phase, Orion plans to reclaim some 1,000 acres of land fronting the second phase to build high-end bungalow lots.

Ong expects to hold the ground-breaking event for the tower by mid-April, and it will take about three years to complete. He added that the gross development cost for the tower was RM620mil, while the gross development value was RM2.5bil.

The whole development will take between eight and 10 years to complete.

“CWorks will concentrate just basically on IT, while Orion will continue doing its own core business as the iconic property developer of free trade zone operators,” said Ong. CWorks’ proposed change of name to Orion IXL is still subject to shareholders’ approval at an EGM to be held at a later date.